tv Street Signs CNBC October 28, 2013 2:00pm-3:01pm EDT
three winners, bristol myers up almost 6%, we have a 9% gain in jc penney and cf industries up 5% on the trading session. ty? >> come on home, lot of ketchup waiting for you. >> you got it. >> that will do it for "power lunch." >> "street signs" begins right now. see you tomorrow. ♪ new york city is the place because markets still taking a walk on the wild side as they move higher again. welcome. tribute to lou reed. your hot stories what, if anything, can stop this stock rally. we're going to dig out so-called ugly duckling stocks that unloved but shouldn't be. why american carmakers are singing a sad song today and what mcdonald's did, mandy, which might be one of the dumbest things we've heard in a while. >> it is. let's take a look at those markets behind me.
the s&p 500 has barely moved today. it is nonetheless three points to the upside around session highs and folks, don't let this seeming lack of action fool you, it is managing to clock a record intraday high all over again. for the dow transports, scoot along and take a look at those numbers here behind me. up by 47 points sitting another record high here despite the generally lack luster market in terms of movement today and just to show you how steady october has been haven't had a two-day losing streak in a row in three weeks. a steady eddie month so far. brian? >> mandy, thank you very much. we are now officially halfway through earnings season. we've got facebook and we've got apple to come today and a big fed day coming up on wednesday. that, my friends, is a lot of news but have no fear, we can handle it. let's break it down with lou breen and david lutz. david, big week, apple, facebook later, the fed, a bunch of stuff out there we don't have time to
talk about. what's number one to you? >> brian, obviously it's going to be the fed and it's also the bank of japan. two major central banks this week and we're seeing traders sitting on their hands. a lot of the single stock volumes globally have been very low today and we see that trend continuing the next couple days as we get a lot of data points coming in. the fed should be relatively predictable at this point. they're going to be sitting on hold given what happened in d.c. but it's going to be interesting to see do they give any kind of language towards q1 when all of a sudden we're going to be dealing with the same d.c. issues which could cause them to hold off on tapering again. bank of japan they've been sitting there watching the yen getting stronger and stronger over the last couple weeks and need to talk down that yen. that could be a factor in the marks as well. >> feels like a little danger here, lou. dave said the weak -- the midweek meeting of the fomc should be a nonevent and so many people are expecting it to be nonevent, if they even sound
slightly hawkish it could be the catalyst for a much needed correction or pull back in this market which a lot of people are saying is getting overbought. >> the point that fed does become less accommodative that will be a concern for the market. i don't know like the other guest here, i don't think we're going to see anything in particular at this meeting, but the interesting thing is that we're depending on the fed to continue doing this ands the fed is using communication as one of its -- as one of its tools. and so that can be very misleading at times as it was in september when the market was kind of set up for the fed to begin taper and they didn't and we had quite a market reaction as a result. it was a positive reaction but that's not necessarily to say that we can't have a negative reaction from fed miscommunication at some point in the future. the fed has been important to this. new all-time highs and yet different measures of growth like phenomenal gdp at a level associated with a recession, not growth, the labor market continues to be a basket case by many measures, and overall,
personal consumption expenditures is at an annualized rate that is more associated with recession. >> these record levels, almost day after day, lou? >> i think the fed has tiltsdsed the playing field certainly and that was sort of part of the idea, when they first went to qe2 back in november of 2010, bernanke wrote a piece in the "washington post" saying this, he wanted to see an asset rally that would then create a wealth effect, therefore aggregate demand. he's gotten the first aspect, the rally, but i think the rest of those boxes are left unchecked at this point. >> david, a lot of people have talked about the impact of the economy, the government shutdown, and i was actually thinking, which is always a very dangerous thing, that this time last year, a lot of people were scrambling for their lives literally with hurricane sandy, two years ago, we had another massive tomorrow, irene on the east coast be lot of it terrible weather the last few years, but yet, this year it's been beautiful. this is wheres most of americans live and i'm thinking could we
have mitigated any negative hit from the federal government shutdown by the fact we've had terrific weather and vn been out of work a couple weeks at a time this year. >> you probably hit the nail on the head there. we're looking at the consumer stocks going in the year end. i mean wall street has a negative bias towards the u.s. consumer for the holiday shopping season. we think that's a big mistake and ground zero, the main reason for that is gasoline prices. you guys have had me on several times talking about how our ethanol policy is reversing and gasoline prices are driving down. this is a massive tailwind for consumers going into the end of the year. what's going to be pretty interesting, though, is the quirk that we have in the calendar. i mean we have one less weekend this year between thanksgiving and christmas. that might benefit a lot of the internet retailers as opposed to the bricks and mortar guys. it's going to be interesting to see how things develop but yeah, wall street's basically shrugging off this shutedown and you probably have a good reason for it. >> what kind of strategy do we take? do we expect a rally into the
year end, a pull back before a rally into the year end and what is next year going to look like? what are we doing in terms of the playbook over the next three months? >> as far as making a market call i don't think that's my place. i do think, you know, back to the theme that we were talking about before, that the furtherer with go along here the more interesting or the more dangerous the fed communication and the reaction of the market could be. you know, one point case in point, is the unemployment rate. the fed has tied that in a certain respect to the qe but more specifically, to the fed funds hike. we could be theoretically at 7% at the end of the year with the unemployment rate and the market may start to eye that 6.5 well before the fed intends it to. as far as, you know, a signal that the fed would start to think about raising the funds rate. so this idea of communication and i think as we enter the new year that's going to be one of the key things for the market and for the economy in general how the fed is able to communicate or if -- will there
be miscommunication between the fed and marketplace. >> since we're talking about the fed and what rates are going to do over the future, dave, i see that in terms of where the ten-year target is going to be, morgan stanley is actually lowering it. what do you make of that? do you agree? >> yeah, absolutely. i think part of the reason, mandy, you know since we're not tapering we keep buying more and more of the universe treasure y treasuresries out there. i thought i heard a stat a couple weeks ago if we don't taper by the end of december we're going to be buying almost 75% of all new issuance out there. that is going to be a persistent bid under the treasure market and what's going on in japan. a lot of the pepgss and insurance companies starting to scramble for higher yielding products and you know what, u.s. ten-year yielding 1.9% over the japanese ten-year you will get a decent bid in the treasury pit so i think that could happen and you could see the builders, the reach, staples and utilities outperform in the end of the year as people start seeking for yield in equities. >> the rate sensitive stocks and sectors. >> or the boj devalues the yen,
stocks soar, the nikkei continues to power higher. >> and you run victorious at the end of the year because you will have been correct on one of your predictions. >> about the nikkei. can't let the yen do this. can't let the yen continue to get stronger to david's point. >> they can't. >> you know, they're not going to do it, not going to sit back and do nothing. >> i agree into they're not our over. >> i agree. >> only talking your book. >> fake book. >> would that be memoirs of a geisha book. >> part two. >> thank you very much. the link to the president's website just hacked. we're going to have news coming into the cnbc newsroom next. >> and later on, some outrage. mcdonald's is bagging heinz ketchup. wow. will that cut the mustard with investors? werm we're going to find out. another big blow to the carmakers and a billionaire's epic implosion. the last one was terrible. (vo) you are a business pro.
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of hacking. what do we know? >> our alert social media team has been monitoring a situation in real time over the past couple minutes that involves the @barack obama twitter handle and apparently hackers have been able to redirect some of the links going from @barack obama to propaganda videos that appear
to come from an entity called syrian truth. the problem here with the @barack obama twitter handle seems to be with the so-called link shortener, the thing that makes the links can be long manage bts on a twitter page. that link shortener appears to be redistricting content to a syrian-backed video of propaganda video about terrorism and what's fascinating about this, watching a tus until real-time between two teams of cyber experts here the barack obama team appears to be fighting back against this attack because as we're watching, some of these links redirect themselves back to the initial content and then have been redirected back to the syrian content. a struggle in real time. meanwhile this has been a very big day in washington in terms of u.s. spying blowback. the spanish called in the u.s. ambassador to spain demanding answers to this recent report from edward snowden's allegations that the united states collected as many as 60
million communications in just one month in that country. defense secretary hagel was asked if he has been aware of any of the allegations of the u.s. spying on foreign leaders. he declined to comment on that and eu officials were here in the u.s. here in washington today. those officials expressing some real frustration here with the situation involving u.s. spying in europe and take a listen to the german eu official who was here on capitol hill today express something of his frustrations. >> we have to find a new way that we concentrate on fighting terrorism and not spy on everyone. we together have to find this level of freedom without stopping fighting terrorists. >> so guys, a worldwide battle in cyber space ongoing right now. the parent syrian led hacking attack against @barack obama twitter handle, blow back from u.s. spying allegations, just a the lot at play here, lot of moving parts. >> eamon, quickly before we get more on the nasdsa story coming.
a twitter ipo coming, if the president of the united states of america twitter account can be hacked what does that tell the rest of corporate america or individuals ate the state of twitter's security, a few key days ahead of the ipo? >> another good question is how much are markets relying on information they're getting over twitter now that we know that some of it can be spoofed. we had a situation involving allegations of some kind of fire at the white house over twitter last year. that started a market reaction and people realized it was a hoax. people have to take this stuff with a little bit of a grain of salt before they can verify it. but yeah, you're right. i mean the question is, how reliable is this technology? on the other hand, look, the president of the united states is going to get a lot more hacking attention than the average ceo of the average company, right. his account is under more or less constant attack you would have to imagine. >> and it still got beaten. thank you very much. so you heard the reports of 3 m's calls in france being
monitored. could the spy scandal hurt american companies, specifically tech? big international firms decide it might be too risky to let sensitive data be held bay company that could be compromised. bring in jeff john roberts, new face of cnbc. the idea and welcome to the program, good to see you, goes like this, if i'm a gigantic european company and thinking about putting myself on the cloud or whatever it is, you know, would i think twice about going to an amazon or apple or a google because i'm afraid of the relationship or what might be compromised with u.s. government? >> well, a lot of europeans are very angry, legitimately, sincerely angry, they believe that they're being spied on by the u.s. government and that's breeding calls to we don't want to store data with american companies, stored in the american cloud anymore, but realistically there's not a lot of choices. you have giant companies like amazon and google about the only ones that can handle that data at that moment, so a lot of what you're hearing is a lot of sound
and fury but i don't think we're going to see big changes any time soon. >> to what degree, i can imagine european companies that competes with the amazons, microsofts and googles of this world if there is such a thing you say, they're rubbing their hands with glee and probably fanning the hysteria because maybe i'll get the business? >> exactly. a lot of the outrage is a bit manufactured by some of these would-be competitors. in europe the big tellcos that want to move in and take some of the -- the cloud storage opra ragss are a lucrative business and the europeans want to get a piece of this. as for the whole security thing, i mean realistically, there's been intelligence sharing going on for some time. it's just with the snowden leaks it's in the press day after day. is america doing anything differently than five years ago? hard to say. but the reality is, i think a lot of european companies smell a business opportunity and so the more they see about, you know, the u.s. being denounced as spying the more they like it and the more they're hoping that european companies will come
home to them instead. >> is it all fake [ inaudible ]. i pick those because of the focus of the segment or real outrage here? >> sturm and drank isgood way t put it. i think europeans are worried and outraged. in europe their history is a bit different. in east germany you have secret police and world war ii, whereas north americans aren't familiar with that day-to-day spying. that didn't happen to our grandparents to the same degree. because of that, the outrage is real, but realistically, i mean american companies, are they worse than european ones, i don't know. europeans spy ones them too, so a lot of this i think is sort of sterm and drang as you say. it's not going to bite the american companies. we'll hear a lot of criticism. going down the road if european companies can get their cloud capacities up to spec, maybe we'll see some changes. >> see what kind of real material fallout there is.
jeff, thank you very much for joining us today. and still ahead on the show -- >> there are only 56 shopping days left until christmas, so how do retailers position. interview with the ceo of bf corp right ahead. >> calling them ugly duckling stocks, names that don't look pretty right now but if you play them the right way, they could bloom into beautiful swans. just like us. we're back after this. ♪ ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪ ♪
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don't look now but there are just 57 days until christmas and that's only 56 shopping days, folks. better get at it. retailers and apparel makers, are they sflds courtney reagan live with the cf corp at one of the biggest retail conferences of the year. courtney? >> that's right. good afternoon to you, brian. i am here at the women's wear daily apparel summit in new york city joined by the ceo of the corporation, eric wiseman. you just reported a pretty strong quarter and looking ahead to holiday. you sell a thousand pieces a minute, i understand. >> we do. >> you told us earlier. a lot of forecasting goes into that. what do you expect from the holiday season? >> we talked about it with our
earnings release last week, that we're expecting a 10% increase in our revenue this fall worldwide. and we're on trend to do that. but of course we need a reasonably good holiday season. and that implies good weather and a bunch of other things. we've made good, prudent normal seasonal expectations for our business and we think we'll grow 10% in the fourth quarter. >> vf corp has 30 plus brands. >> we do. >> your own retail stores but sell in a variety of other stores, locations, formats. you touch the consumer on the lower end, middle end and high end. >> absolutely. >> how do you see the customer segments performing right now? >> the high end is the weak link of those ends in the united states. the luxury consumer has pulled back a little bit and i think that's coming to light in some of the comp store sales from the luxury retailers. but in the middle and at the bottom end it's okay. it's not robust but it's okay. the american consumer over time has been really resilient and they've hung in there during all the gyrations of the last few years and they've been spending
with us all year and we were up 5% in the last quarter. we think that consumer will still be there with us now. >> we've seen some deals happen in the retail environment. what's on your acquisition shopping list right now? >> that's a really, really good question. if i had a really good answer for you i would share it but i can't. >> but you do plan to grow the business through both acquisitions and international growth? >> always. acquisitions are always part of our agenda and our international growth story has been fantastic the last ten years. i mentioned at this morning's conference in 2000, 16% of our earnings came from outside of the u.s. and last year, over 50% of our earnings came from outside of the u.s. and that was just all opportunity for us to go chase down around the world which we've done in the last decade. >> very interesting. mandy, do you have a question? >> i would like to follow up to what you were saying about acquisitions being a part of an agenda. where you said you're still scouting for acquisitions. i'm sure you're not going to tell us what you're looking for but what segments of the market
you might be pitching for in terms of an acquisition? >> sure. over the last four or five years, our focus has been on the outdoor and action sports industries. places where we have two of our biggest brands, three of our biggest brands with tim berland, north face and vans. that's been a good sector and those brands are global brand and activity based meaning there are activities you can think of when you think about the north face or tim berland. people are buying apparel not just for fashion but how they live their lifestyle and helps grow those brands globally. that would be the sweet spot dubut doesn't exclude other opportunities. >> i understand people think that's the new accessory for this holiday season. you may be in luck. >> i hope so. >> thank you for joining us. >> mandy and brian, back to you. >> thank you very much for that. it is time now for the earnings squad. melissa, over to you. >> thanks, mandy. welcome to earnings squad, we dissect the stories everyone is
talking about, trade the stories you may have missed. joining me is dominic chu and the doc, jon najarian, founder of option monster.com. hartford financial, scheduled to release earnings after the bell today. nice performer for the year but 50% or so year to date. >> this past quarter hasn't been that outperformance that's why i'm looking for it to outperform this quarter, melissa. since 2009, the stock fell all the way down to about 5 bucks a share in march of '09. it was $100 stock, of course, back in '07 and '08 and i think it's going back into the 60s here. this is a $31 stock now. i don't say it's going to make it there on this earnings report but i think what they're doing right now, the return on investment and so forth very strong. 8.7 pe. more towards the 12 side, melissa, i think this thing has a 40 handle on it. >> also a stock that hedge fund manager john paulson was very involved in at one point as well. >> exactly. watch for that. 3d systems set to report third
quarter earnings before the bell, one of the high flying stocks, a double for the year and a raiser blade model where they make the money on the cartridges so the things like waxes and materials and things that go into the printer, although all parts of their business very high margin. we spoke to the ceo on fast money and the lowest part they sell is the low printer in the 40s margin and the materials in the printers low 70s margin. those margins are spectacular the industry leader when it comes to that and they have the most market share. they've been going into commercial manufacturing as well as residential. but, of course, with such high growth in terms of the stock price, a lot of people are looking for holes in this high fire story so they look at sales growth, they book sales and sales growth when its go to a reseller, printer to a reseller and not the actual end consumer. something to be aware of. also, 37 acquisitions since 2009. so what is the true organic growth?
a high flying stock. >> i mean you're talking about a price to earnings multiple over 100, so people are paying up to own these shares for sure. >> yeah. but it is the future, really. >> it is. >> steve jobs and johnny showed that. everybody wants them now. and i believe melissa, you'll see these guys grow dra in theically, although to grow into 100 pe to dominic's point is a difficult thing. >> we're watching river bed by the way. releasing third quarter earnings after the bell today. what are you watching for? >> this is interesting. this is one of those computer networking/cloud computing companies. we heard it with citrix before, maybe some wrinkles in the story there. whether or not businesses are still spending. this is a stock that goes up or down by a lot around these catalysts. every time they up their sales forecast or reaffirm it, every time they say maybe we're making an acquisition, this time around the options market, jon, talking to you about it, pricing in an 11% move up or down in the stock after earnings, so this is going to be one where fireworks could be there. >> yep. and apple's the one, of course,
that everybody is watching. but everybody who's talking about this stock, is hopeful and buying upside calls it seems. >> that does it for earnings squad for today. join the conversation, tweet us, back tomorrow on squawk on the street and see you tonight on fast. back to you. >> thank you very much. on deck, housing, taking a huge hit last month. is there any reason whatsoever to put your money that these once hot names. >> later on why consumer reports is pumping the brakes on american cars. stick around. peace of mind is important when you're running a business. century link provides reliable it services like multi-layered security solution to keep your information safe & secure. century link. your link with what's next.
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wish you happy monday, happy monday, welcome to "street signs." some of the stocks on our radar. first of all crocs getting a big hit from a downgrade from overweight to neutral at piper jaffray. >> down 5.4%, to $12.94. the price target was cut to 15, kind of silly considering the stock is underneath that anyway. piper cautious on near term trends, lack of a catalyst to reaccelerate growth. stock down 9% year to date but a $31 stock in mid 2011. crocs have lost a little luster. >> okay. a look at bristol myers squibb hitting 52-week highs today. >> a very quiet good story for a
long time now. the stock trading at levels not seen since january of 2002. upgraded to overweight from equal weight, morgan stanley. raised their target to 60 bucks a share. stocks at 52 and change. also add credit suisse's u.s. focus list, they continue to deliver good test results for their new rheumatoid arthritis drug. >> and also on the move today. >> this stock has been yeah, unbelievable. >> ten-year chart is like the roller coaster at six flags. it was upgraded to a buy. increased their target from 10 to 3 because they have hired jpmorgan to explore a sale of the company. sell at roth capital. one drug has been hot and then not. look at that stock chart. 60 bucks to a couple bucks. stay away from den dre yon. may sell but be careful. >> today's under the radar stock which is clovish oncology. which is moving positive. >> it's been a super hot stock. try to bring you new names, down
today but they've got positive trials. they basically focus on sort of smaller areas of cancer and small cell lung cancer treatments here in the positive drug trial results, 8 to 9 patients experienced tumor shrinkage, up about 240% year to date, down today but overall has been a very, very solid year for clovis oncologist, boulder, colorado, based. u.s. pending home sales dropped sharply in september. the index falling to its lowest level send shares of the home builder etf down today. remember most of the names in that are home depot, best buy, lowe's, select comfort and others. either way what does this mean for the housing recovery. start talkings numbers, carter worth, chief market technician at oppenheimer, zach kara vel, river twice research. zach, with you, down but you get my point about the constituents. either way do you believe housing is in trouble? >> i don't believe housing is
going to have what it head from 2010 to 2012. this incredible collapse in the market, massive foreclosures, unemployment, people not being able to move, cats and dogs living together, you basically were going to see some sort of recovery barring an economic collapse and you've seen that. the question that is going forward, are you in anywhere in the position at the same kind of fundamental resurgens and i guess i have two answers to that. one is i hope not and two is no. i hope not because housing should not be leading the u.s. economy. it's a derivative of activity. and no in that there's only so much that people will do in terms of mobility and the job market and buying new and existing homes. when we saw the existing home sales were pretty bad today and derivatives are likely whirl pool is in this, hxp as well. these stocks have had a good run. i would hold off. >> hold off here. what about the charts, do the technicals back up that comment from zach? >> they sure do, meaning this is a broad aggregate. 35 names, equal weighted.
home builders only a third. all sorts of other things as already cited but you appliance manufacturers like whirlpool, carpet manufacturers, things like pier 1 and mattress companies. the comparative chart is what's interesting. look at a long-term chart, these have been highly correlated and the home builders all sort of rolled over as the rest of the names or components which about two thirds have continued higher and that's the home depots and so forth. what's starting to happen those are starting to succumb, the williams sonoma starting to give ground, some of the mattress companies, home depot starting to roll a little bit. these are going to go the way of home builders. one were to look at a chart of the hxb, a triple off the lows of the last two, three years, and then we've broken trend. >> yeah. >> one can see that quite clearly and a break in trend is that, a break in trend. it's very hard to get back into a trend if you're lucky and more of that, the break is the beginning of more trouble. >> the fact that our chart is
using blue and fluorescent green, take the seahawks in the points tonight? >> thank you very much. appreciate it. remember folks, for more technicals and fundamental analysis, check out the on-line edition of talking numbers part of our partnership with yahoo! finance. >> still ahead on "street signs," what is mcdonald's thinking? the fast food giant is dropping heinz ketchup from its menu. all because of a rivalry with burger king. will customers stand for this? >> plus, ugly duckling stocks, names that don't look very pretty right now, but our guests say could turn around very easily. we're going to have those names coming up. but first, bill griffith what is quacking on the "closing bell"? >> plenty. coming up, despite repeated promises many americans find they cannot keep their doctors or health care plans because of how their states are handling obama care. one woman whose insurer phased out her plan. she now faces a 65% increase for a comparable plan.
also, we'll take the pulse of housing. the ceo of owens-corning ringing the closing bell, make insulation to roofing materials. get ready, we'll have instant analysis and investor reaction to apple's earnings out after the bell tonight. maria and i look forward to seeing you coming up on "closing bell" after "street signs." stay tuned. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. because what you dont know can hurt you.urance, what if you didn't know that it's smart to replace washing-machine hoses every five years?
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carl i kap's bet on netflix netted him a 400% return in 14 months. talk about an ugly duckling turned into a sworn. dominic chu is on a mission to find other battered stocks that could hopefully have a similar turnaround story. find those swans for us, dom. >> we're trying to find them and while there is no crystal ball, one of the things that a lot of fund managers look at are factors. what kinds of characterist is if you will make a stock maybe want to breakout. one factor is price to sales, another one is momentum. here's a stock that's got some real negative momentum, down 16% in the last three months. but, but it's got a price to sales ratio of just around 1.2. 1.20 in stock price for every $1
in sales. this company is interesting because i maybe need to go on a diet here. i know i do. this stock is weight watchers. this is a stock that might be due for a breakout if it get back to some of its original levels again. just looking at a couple factors. another one we want to watch is another stock worth 16 bucks a share and this particular one is down about 14%. just over the past three months. it's got a price to sales ratio of 2.8, $2.80 of stock price for every $1 of sales. and this particular one here is interesting because it's all about voice recognition software. we're talking about nuance communications, a stock which carl icahn is the biggest shareholder having a 17% stake. just a couple names we're talking about, coming up on "closing bell" we'll look at another couple of them, one of which has a splash zone associated with it and, of course, seed life. stay tuned for that one up next on "closing bell." >> a what? a splash zone? what did you say? >> a splash zone, yeah.
absolutely. >> c wipe. >> it could be. >> what's a c wipe? >> marine life around this particular stock. you'll have to stay tuned. >> that's a great tease. >> i have no idea. >> i have my face crinkled up. >> all right. so what are some other ugly duckling stocks. ask susan fulton and mike binger. susan, roper industries, okay, not talking about mr. roper from "three's companies" why don't they look attractive and what do they need to do to turn things around? >> well, they are -- they came out with a bad -- a lowering of forecast today and so the stock is down a little bit. they are a heavy industry company. they work primarily in nuclear energy and in oil and gas. and they have historically a very good record of acquiring companies and then turning them around and making them profitable. so what we see right now, they haven't acquired anybody
recently. we think they have -- they're a couple that they could have in their target and they're a business that knows how to make money and knows how to deliver for its stock holders. >> expect more acquisitions. mike, you have chosen the duckling of all ducklings, jc penney. why will it turn into a swan for you? >> well, first want to put in the camp i still think jc penney is speculative right now. but i'm in minneapolis and i remember last year at this time, when best buy was left for dead. people said the model is dead, stock was $11. business stabilized and we know where it is now. i think jc penney could be in the same situation right now. the ceo has come out even today he came out and said sales are getting better. comp store sales are getting better. i believe they certainly have enough cash to get them through the holiday selling season and through the spring selling season. they've done two rounds of financing. the market really didn't like the equity round of financing
but they have a lot of cash, the ceo has said sales are stabilizing and getting better. if that happens and it proves out to be, i think that jc penney could be a winner from here. >> mike, you know, i love, i love minneapolis, right, the local is a great bar, all right. you haven't been there probably this segment because jc penney sells a bunch of stuff other people also sell. best buy a little more unique. that was my stock pick, best buy, i agree on that one. i can't agree on jc penney. make the case a little more. >> struggling. >> well, by the way, everyone sells electronics. target, walmart, all sell the same things as best buy, best buy does it a little better. jc penney, they went off the rails. ron johnson took them to a place and tried to transform the company to something they could not be. they're refocusing on execution, i think they are going to sell to middle to lower america. i think that's their target market. i think they're getting back to
their roots. i think they'll work on execution. they said sales have gotten -- have really bottomed and are getting better and i think you need to watch this story play out. it's always darkest at the bottom but i think things are getting better. >> even the ceo joked today on a question about employee morale that is probably better than it should be. susan, i want to ask you about caterpillar. this is another one that is kind of, you know, had a tough time of late and i know it's still doing tough. why is it going to turn around? >> susan? >> yeah. hi. i didn't get the name of the stock. >> caterpillar. cat. >> what? >> caterpillar. >> oh, i i love caterpillar. it's in such bad shape. caterpillar has run into a real issue around the whole mining industry which is in the pits. but caterpillar is a very well-run company. it increased its dividend 15% this year. it has a real depth of expertise
and good management. my problem with penny i don't think they have good management yet. i don't like any company where i don't feel very, very comfortable with the people at the top and caterpillar has -- is a cyclical business, but materials, mining, drilling, et cetera will come back. >> got it. >> susan and mike, thank you very much for joining us on the ugly ducklings that will hopefully become beautiful swans. up next the reliable cars consumer reports ranked them and one very disturbing trend, brian. >> later on, mcdonald's cans heinz ketchup, burger king relishing in the news. is this just another misstep for the golden arches? we will we're going to debate it coming up. (vo) you are a business pro.
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it's not all good news for u.s. carmakers. phil lebeau run us through the big headlines here. >> the big headline is look at the bottom of the list, mandy. the 28 models ranked, look at the five least reliable. yes, the worst is mini accordin according to "consumer reports," then lincoln, ford, cadillac and dodge. if you're a fan of the big three, you don't like looking at this. consumer report says ford's ecoboost has problems. we're not just talking about not getting the mileage, we're talking about them not performing the way they said they would. they say ford products have problems when it comes to electronics and infotainment issues. >> my ford touch had problems for a couple of years. problems two years ago, problems last year. they've been trying to correct them. what's interesting about it, we keep seeing more and more
features. they get updates, more and more features, more and more to go wrong. >> with cadillac and chrysler, the news isn't much better. cadillac posted the biggest decline in "consumer reports" reliability, falling 13 spots down to 25. when you talk about chrysler, their most reliable models, the ones "consumer reports" holds up as best of what they offer, they went down. ford and gm, shares haven't been looking too much if the reliability may be slipping if you can see both are up nicely over the last year. >> guys, back to you. >> phil, thank you very much. let's bring in drivingthenation.com's luann ammond. what do you bhak of this? a lot of cars are made in america. can you distinguish between a foreign and american car? >> you can't.
so many are made in north america, which is canada, united states and mexico. so, a lot of these are also global cars as well. right here in the united states, and what you're really concerned about right now when this "consumer report" comes out is what it means to your stockholders, your ceos and car companies. that is market share. because market share means brand loyalty. it's really great when you have a car on owner that's very satisfied because they not only are satisfied with their car and will buy one in the future, but they will tell all of their friends about it as well. when that doesn't happen, you get what's called a conquest. they will go to another dealership, trade in that car and buy another brand. and that brand will gets the future sales and there goes your profit. >> how much does an individual consumer actually look at something like this reliability report and make a consumer purchase on the back of it? >> you know, they look at it a lot, mandy, because i'm on a chat line with warren brown on
"the washington post" every friday. it's one of the things they're concerned about the most. it's not -- it's the cost of a car and the fuel economy, but after you've made those choices and after the warranty is gone, you still have to pay for all the reliability that's not there. and that's the biggest problem with reliability, is how much it's going to cost you in an unforeseen, unfixed cost that you didn't think about in the beginning. >> lou ann hammond of drivingthenation.com. it was a pleasure. thank you for coming on the program. call it the mcketchup controversy. mcdonald's is ending its 40-year marriage to heinz ketchup. jane wells has the story. >> so many people telling me ketchup matters, but mcdonald's is fancy brand. burger king's is heinz. the plot thickens. heinz is no longer cutting the mustard for mcdonald's but
they're only using heinz in two u.s. markets. minneapolis and pittsburgh and also overseas. instead, most of its kechup comes from other unnamed suppliers. why cut off heinz? the ceo of heinz used to be the ceo of burger king. there could be more to the story. wait for it. ♪ anticipation ♪ anticipation ♪ it's making me wait >> the new co-owners of heinz also own burger king. the new ceo is slashing co inind slashing costs, what's good for burger king. bk is also promoting new french fries. what makes any fry taste better? ketchup. what's the best ketchup? "mad men" says ketchup but power
lunch liked america's choice. we asked heinz for a comment on mcdonald's decision and got no response. >> what is catsup, you see that, c-a-t-s-u-p? >> yeah. >> i don't know what that is. >> my aunt has cats but i won't want anything they're disdiscreeting. >> i think it's from ind neesh shan. go to encyclopedia. >> there's nothing about cat excriment on here. >> i didn't say that. >> i think catsup predates ketch ketchup. >> i went to catsup.com that wants to sell me stuff. >> thank you, jane. coming up, the most epic
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don't wait. call now. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. one of the greatest destructions of wealth by mankind, one of the greatest downfalls of any billionaire in history. robert frank here with the story of iky batista? >> he has shown us exactly how the high-flying.
brazilian oil tycoon said he would be the richest man in the world. private jets, a yacht, a mercedes slr mclaren, which one does, and a net worth over $34 billion. instead of setting a record for wealth, he set a record for wealth loss. the empire was short on oil. his company shares crashed and his main company could soon file for bankruptcy. between 2012 and this summer, he lost over $33 billion in paper wealth. that's more than the gdp of bosnia or jamaica. that's around2.6 billion ber month, $87 million per day or $3.6 million per hour. there goes another million. the planes were sold, yacht's being sold and under investigation by brazilian investigator. he's a sign of brazil's false miracle, a man undone by huberus, but he can make f
fortunes through hot money. >> he called his plays idiot-proof. >> the people who look like idiots are those who invested a lot. he said his assets were trillions of dollars. turned out there wasn't much there. >> thank you. >> thank you all for watching "street signs." >> "closing bell" is next. see you tomorrow. >> hi, everybody, welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. my move higher today for the s&p 500 would be another all-time high. >> after three straight weeks of gains for the dow and the s&p. i mean, it's been a stellar couple of months, really, for the markets. even during a time when it's typically a down period. i'm bill